Swaps Rules Will Help Market Grow $40.7 Trillion, Citigroup Says
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The market for interest-rate and credit-default swaps will grow more than 10 percent to $435 trillion by 2013 as oversight of over-the-counter derivatives improves price transparency and cuts trading risk, according to Citigroup Inc.
Banks, hedge funds and other investors are bracing for sweeping changes to the private derivatives market, including increased capital requirements and most trades being processed by clearinghouses, which require margin payments. The Dodd-Frank Act, passed in the U.S. last year, and rules being created now by the European Parliament will regulate swaps for the first time in their 30-year history.